Zinu
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Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 8:04 am

According to the the following articles released recently:
https://www.flightglobal.com/news/articles/vietnam-airlines-profits-up-as-it-eyes-ambitious-fle-459701/,
https://simpleflying.com/vietnam-airlines-fleet-plan/
https://www.businesswire.com/news/home/20190717005251/en/Air-Lease-Corporation-Announces-Lease-Placement-New
https://centreforaviation.com/news/icbc-aviation-leasing-and-vietnam-airlines-finalise-documentation-for-three-a320neo-aircraft-913512
https://www.ch-aviation.com/portal/news/79206-vietnam-airlines-seeks-govt-nod-for-5050-narrowbodies
https://www.vir.com.vn/vietnam-airlines-to-dry-lease-five-brand-new-regional-jet-aircraft-67159.html

Vietnam Airlines is doing well financially and is currently submitting there 2021-2025 fleet investment plan to the Vietnamese Government for approval. A few things to note:

  • Vietnam Airlines is looking to buy or/and lease 50 narrowbody jets + 50 options to support growth to replace their older A321ceo from 2021 to 2025. They are also looking to receive 3 787-10 by the end of 2019
  • Lease agreement has been signed with ALC and ICBC for additional A320neo to join the fleet in 2020
  • They are also looking to lease or order additional regional jets from either Embraer or Bombardier (now Mitsubishi?) to replace the aging VASCO ATR-72 (Probably E175 or CRJ900) to be delivered in 2020
 
jghealey
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 8:58 am

The vast majority of their A321s aren't very old so I'm surprised they're talking about replacing these so soon... but I guess the A321neo would be the obvious replacement given that they already operate several A321neos, have several on order and clearly also operate the A321, assuming they are happy with the neos that they already have, and assuming they can get delivery slots.
 
Motorhussy
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 11:51 am

Great to read they’re doing well, they’re obviously well managed. I hope they commence flights to New Zealand at some point soon as Air NZ have ceased operations between the two countries.
come visit the south pacific
 
smi0006
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 11:58 am

Motorhussy wrote:
Great to read they’re doing well, they’re obviously well managed. I hope they commence flights to New Zealand at some point soon as Air NZ have ceased operations between the two countries.


Don’t they also own significant percentages of their domestic competitors? They own significant amounts of Jetstar Pacific at least. I’m not saying this is bad, not they don’t necessarily operate in a competitive domestic market.
 
evanb
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 12:22 pm

I've spent a lot of time working in Vietnam in the last few years. It's a fascinating place. Nearly 100 million people and strong (and consistent economic growth). Unlike China a lot more of the economic growth has been driven by a growing domestic economy rather than just export/investment led growth.

One thing that Vietnam Airlines has going for it is it's staggeringly low cost base, mostly through really low wages compared to foreign competitors.
 
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RyanairGuru
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 12:27 pm

smi0006 wrote:
they don’t necessarily operate in a competitive domestic market.


I was thinking the exact opposite. I am really glad to hear that VN are doing well, but I am concerned about how sustainable the growth in the Vietnamese domestic market is and that could put significant pressure on their financial performance. Vietjet have 200 MAX and 120 NEO on order, and Bamboo have ordered 50 NEO and 30 787. AirAsia Vietnam appears to be on the back-burner again, but it will presumably happen at some point.

VN do own 70% of BL (plus they own VASCO), but Vietjet and Bamboo are privately owned. BL is quite considerably smaller than VJ, about one-quarter to one-third of the size.
Worked Hard, Flew Right
 
evanb
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 12:30 pm

smi0006 wrote:
Don’t they also own significant percentages of their domestic competitors? They own significant amounts of Jetstar Pacific at least. I’m not saying this is bad, not they don’t necessarily operate in a competitive domestic market.


Jetstar Pacific are relatively small, but majority owned by Vietnam Airlines.

The real competition comes from VietJet Air and potentially Bamboo Airways, however, Vietnam is still an autocratic country and while the sector has been partially liberalized, it's is not an open sector which means that the state will continue to control the sector and favor Vietnam Airlines strongly. I don't see this changing anytime soon.
 
evanb
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 12:41 pm

RyanairGuru wrote:
I was thinking the exact opposite. I am really glad to hear that VN are doing well, but I am concerned about how sustainable the growth in the Vietnamese domestic market is and that could put significant pressure on their financial performance. Vietjet have 200 MAX and 120 NEO on order, and Bamboo have ordered 50 NEO and 30 787. AirAsia Vietnam appears to be on the back-burner again, but it will presumably happen at some point.

VN do own 70% of BL (plus they own VASCO), but Vietjet and Bamboo are privately owned. BL is quite considerably smaller than VJ, about one-quarter to one-third of the size.


The Vietnamese economy is doubling in size, in real terms, every decade. If there is a one-to-one relationship between air travel capacity needs that would imply fleet needing to double every decade. I acknowledge that this is a very vague metric, but roughly, the current combined order book is about 400 aircraft with current fleet about 200 aircraft. If one sees the current order book as stretching out over more than a decade then it's not unsustainable.
 
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MrHMSH
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 12:46 pm

evanb wrote:
RyanairGuru wrote:
I was thinking the exact opposite. I am really glad to hear that VN are doing well, but I am concerned about how sustainable the growth in the Vietnamese domestic market is and that could put significant pressure on their financial performance. Vietjet have 200 MAX and 120 NEO on order, and Bamboo have ordered 50 NEO and 30 787. AirAsia Vietnam appears to be on the back-burner again, but it will presumably happen at some point.

VN do own 70% of BL (plus they own VASCO), but Vietjet and Bamboo are privately owned. BL is quite considerably smaller than VJ, about one-quarter to one-third of the size.


The Vietnamese economy is doubling in size, in real terms, every decade. If there is a one-to-one relationship between air travel capacity needs that would imply fleet needing to double every decade. I acknowledge that this is a very vague metric, but roughly, the current combined order book is about 400 aircraft with current fleet about 200 aircraft. If one sees the current order book as stretching out over more than a decade then it's not unsustainable.


I think the main barrier is infrastructure, or lack thereof. SGN is already creaking and heaving under the pressure, HAN is not as bad but this growth can't be handled by the current airports, certainly for those 2 cities where realistically most of the growth will go. A new SGN airport is still quite a way away.
 
evanb
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 1:02 pm

MrHMSH wrote:
I think the main barrier is infrastructure, or lack thereof. SGN is already creaking and heaving under the pressure, HAN is not as bad but this growth can't be handled by the current airports, certainly for those 2 cities where realistically most of the growth will go. A new SGN airport is still quite a way away.


Agreed, HAN has just had a decent expansion, but the emphasis is and will continue to be on infrastructure outside HAN and SGN (I believe correctly so) and there is much greater emphasis on point-to-point network development rather than hub and spoke.

Unlike some other countries in the region, Vietnam's population is just not as focussed on one or two massive cities. For example, Bangkok metro is about 21% of Thailand's population whereas Ho Chi Minh City is only about 14% of Vietnam's population. The result is that infrastructure investment has gone into places like Da Nang, Hai Phong, Thanh Hóa, Hue, Phu Quoc, etc.
 
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OA940
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 1:04 pm

evanb wrote:
RyanairGuru wrote:
I was thinking the exact opposite. I am really glad to hear that VN are doing well, but I am concerned about how sustainable the growth in the Vietnamese domestic market is and that could put significant pressure on their financial performance. Vietjet have 200 MAX and 120 NEO on order, and Bamboo have ordered 50 NEO and 30 787. AirAsia Vietnam appears to be on the back-burner again, but it will presumably happen at some point.

VN do own 70% of BL (plus they own VASCO), but Vietjet and Bamboo are privately owned. BL is quite considerably smaller than VJ, about one-quarter to one-third of the size.


The Vietnamese economy is doubling in size, in real terms, every decade. If there is a one-to-one relationship between air travel capacity needs that would imply fleet needing to double every decade. I acknowledge that this is a very vague metric, but roughly, the current combined order book is about 400 aircraft with current fleet about 200 aircraft. If one sees the current order book as stretching out over more than a decade then it's not unsustainable.


Plus Vietjet isn't gonna use these planes only for its Vietnam ops. You'll probably see at least part of them going to Thailand, and there's room to grow in both markets. Bamboo is also aiming at a different part of the market, despite its very low prices. The Asian market is growing at incredible rates, and as evanb said these orders will stretch out over the better part of a decade. Besides, aren't some of the Vietjet orders not firm?
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zakuivcustom
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 1:31 pm

Glad to see VN doing well. It's definitely a change from the rest of ASEAN.

The growth in Vietnam is just insane. Inbound tourist number keep growing, domestic demand is only getting stronger, and it's definitely following the step of its northern neighbor (i.e. autocratic rule with liberalized market to drive growth).

evanb wrote:
Unlike some other countries in the region, Vietnam's population is just not as focussed on one or two massive cities. For example, Bangkok metro is about 21% of Thailand's population whereas Ho Chi Minh City is only about 14% of Vietnam's population. The result is that infrastructure investment has gone into places like Da Nang, Hai Phong, Thanh Hóa, Hue, Phu Quoc, etc.


The population is heavily bipolar, though - i.e. Hanoi (~10M) and HCMC (~12-14M). The other metro area (i.e. Hai Phong, Da Nang) are just tiny in comparison (~1M each).
 
evanb
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 1:34 pm

OA940 wrote:
Plus Vietjet isn't gonna use these planes only for its Vietnam ops. You'll probably see at least part of them going to Thailand, and there's room to grow in both markets. Bamboo is also aiming at a different part of the market, despite its very low prices. The Asian market is growing at incredible rates, and as evanb said these orders will stretch out over the better part of a decade. Besides, aren't some of the Vietjet orders not firm?


I'm going to discount Vietjet's ability to build out in other countries quite like AirAsia and Lion Air partly because the countries that Vietnam has the linkages to like Cambodia or Laos don't have the same scale and critical mass. Thailand is the only one but the scale of competition in Thailand is extraordinary!
 
evanb
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 1:46 pm

zakuivcustom wrote:
The population is heavily bipolar, though - i.e. Hanoi (~10M) and HCMC (~12-14M). The other metro area (i.e. Hai Phong, Da Nang) are just tiny in comparison (~1M each).


Sure, but by comparison, Thailand has only one metro area (Bangkok) with a population over 1 million (Chiang Mai is just less than 1 million). Vietnam has 6.
 
MIflyer12
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 2:08 pm

evanb wrote:
The Vietnamese economy is doubling in size, in real terms, every decade. If there is a one-to-one relationship between air travel capacity needs...


There isn't, IME. The air travel demand function is way more complicated than that. Middle class incomes, available airport facilities, law & regulation, competition, foreign demand, geopolitics, bilateral air treaties, proximate hubs, geography... Vietnam has room to grow.

As for a low cost base, it pays as much - if not more - as the world average for planes, parts, fuel, financing (and probably pilots). Even in high-wage countries a carrier's total wages can be under 25% of revenues.
 
evanb
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 3:31 pm

MIflyer12 wrote:
As for a low cost base, it pays as much - if not more - as the world average for planes, parts, fuel, financing (and probably pilots). Even in high-wage countries a carrier's total wages can be under 25% of revenues.


No it doesn't pay anything similar in terms of aircraft and financing. It gets preferential financing through EXIM and Euro EXIM and government guaranteed loans and financing leases. For example, the average effective interest rate of 4% in 2018. Given that the benchmark rate in Vietnam is 6.5% it's fair to say that they are getting amazing financing terms.

And wages for local staff are dramatically lower than the competition. Staff costs are approximately 12% of revenues, so dramatically lower than the 25% benchmark.
 
Airlines0613
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 4:40 pm

I feel like this would be Boeing’s order to lose if Airbus wins the narrow-body order.
 
x1234
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 4:43 pm

I always wondered why they had both the 787 and A350. Geo-political game playing to both the US & EU!?
 
evanb
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 4:49 pm

x1234 wrote:
I always wondered why they had both the 787 and A350. Geo-political game playing to both the US & EU!?


Probably. They've had a split fleet for a while. While it's now B787 and A350 they operated B777 and A330 alongside each other for years.
 
x1234
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 4:50 pm

As they are now CAT 1, as they get more B787-10's their B789 or A359 can be used to launch SGN/HAN-LAX.
 
Zinu
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 11:05 pm

VJ domestic market share has actually surpassed VN (48% vs 37%). I think the current CEO, Duong Tri Thanh has been doing a pretty good job to try to consolidate their domestic network and focus on profitable North East Asia routes without trying to implement excessive expansion as well as improving their soft product offering. I think the current strategy is trying to focus on the current profitable routes and up-gauge when required.

I think that is why we don't see VN rushing to add new routes to Europe or Oceania. The Joint Venture with AF is also working very well for them in terms of European connections. Having said that though, VJ is trying compete aggressively in the South Korea and Taiwan markets as there are a lot of Korean and Taiwanese business and leisure traffic going to Vietnam at the moment. The relaxation in visa policy for Vietnamese travelling to South Korea and Taiwan also helps a lot.

On the domestic front, I have seen lots of travel packages (with Hotels/Resort and Flights combined) being offered to domestic travelers by airlines and travel companies and it looks like they are selling like hot cakes. VJ and Bamboo are also focusing strongly in domestic holidaymakers market. With a growing middle-class, I think more Vietnamese are travelling domestically than ever before.
Last edited by Zinu on Thu Jul 18, 2019 11:28 pm, edited 1 time in total.
 
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scbriml
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Thu Jul 18, 2019 11:19 pm

x1234 wrote:
I always wondered why they had both the 787 and A350.


Why? There's an increasing number of airlines that either already operate both or have ordered both.
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Goodbye
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 12:36 am

Zinu wrote:
VJ is trying compete aggressively in the South Korea and Taiwan markets as there are a lot of Korean and Taiwanese business and leisure traffic going to Vietnam at the moment. The relaxation in visa policy for Vietnamese travelling to South Korea and Taiwan also helps a lot.


You're not wrong! I spend a lot of time in Da Nang and it's like Little Seoul. On any given day there are around 30 flights between South Korea and Da Nang, it's incredible!
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aemoreira1981
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 3:10 am

If VN wants more narrow-bodies, I would suspect that they want something smaller than an A321 (or even A320neo) -sized aircraft that would complement their fleet. What about the Airbus A220-300? Not every route needs a narrow-body plane in the 175-200 seat class, especially for short international routes around Indochina? (That said, I can't see domestic routes being down-sized...I didn't realize that SGN handled nearly 35 million passengers last year.)

That said, any A321s that VN ordered and then leased under sale-leasebacks would likely be candidates for replacement as VN would be returning those to lessors (unless the lessor was VN's in-house leasing division). On this, especially newer models, I'd suggest that US carriers should be all over those leased VN units once the leases expire, especially UA, to replace the p.s. fleet with planes that shouldn't be terribly high-cycle planes and for which there are already qualified pilots employed.
 
potter787
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 3:43 am

Quite surprised because there is a local articles stating otherwise. Profit in first 6 months dropped 11% compared to last year. Especially profit of Q2 dropped 83% compared to Q2 last year. Guess the competition is squeezing them hard.

http://cafef.vn/vietnam-airlines-uoc-la ... 055453.chn


Even though they are profitable but there are signs of slowing down. They are leasing out their A350 in late Q3 and the utilization of widebodies in their fleet reduced alot. Seem like they ordered too many widebodies (perhaps due to political reasons) or their expansion plan didn't work out the way they wanted due to competition.

https://www.ch-aviation.com/portal/news ... -late-3q19

This news is premium so I don't know the details but heard that VN keep quite tight-lipped over it since it's obviously not a good news.
 
zakuivcustom
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 3:44 am

Zinu wrote:
I think that is why we don't see VN rushing to add new routes to Europe or Oceania. The Joint Venture with AF is also working very well for them in terms of European connections. Having said that though, VJ is trying compete aggressively in the South Korea and Taiwan markets as there are a lot of Korean and Taiwanese business and leisure traffic going to Vietnam at the moment. The relaxation in visa policy for Vietnamese travelling to South Korea and Taiwan also helps a lot.


The tourism growth is definitely insane. It literally doubled in 3 years - with growth spread all over the globe also. Granted, South Korea and mainland PRC lead the charge (With South Korean being dominant - yes, more mainland Chinese (~5M) visited VN last year than South Korean (~3.5M), but mainland PRC also has something like 25x more people), but growth from places like Japan and Taiwan along with Europe are also evident.

Goodbye wrote:
You're not wrong! I spend a lot of time in Da Nang and it's like Little Seoul. On any given day there are around 30 flights between South Korea and Da Nang, it's incredible!


That and the fact that every single South Korean LCCs, all 6 of them, fly to DAD, with all 5 ICN-base LCC (BX/Air Busan being the exception, but RS/Air Seoul is there) being on ICN-DAD, is simply insane, consider that it's still a ~5 hrs flight.

The only other routes that you see all the ICN (or Seoul) base LCCs fly are GMP-CJU (duh...) and ICN-KIX/NRT/CTS/FUK/OKA (Which are all like 2-2.5 hrs) along with (for now) ICN-HKG (Since the T'way flight is supposely "seasonal". IIRC it's the route with the most individual carriers flying on anyway, with 11 right now, at least until AI ending the BOM-DEL-HKG-KIX/ICN and T'way stopping the "seasonal" flight).

Oh, did I mentioned that frequency on ICN-HAN is just as insane as ICN-DAD?
 
Morgenstern1234
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 7:45 am

And VN changed their Moscow airports from DME to SVO
 
potter787
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 7:53 am

Morgenstern1234 wrote:
And VN changed their Moscow airports from DME to SVO



Yeah, they changed it since they signed code share agreement for domestic connections with SU
 
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eta unknown
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 8:26 am

I think years ago I read all of Vietnam's overflight revenue is given to VN- not sure if still the case now, but that certainly helps the bottom line.
 
Morgenstern1234
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 8:33 am

potter787 wrote:
Morgenstern1234 wrote:
And VN changed their Moscow airports from DME to SVO



Yeah, they changed it since they signed code share agreement for domestic connections with SU

When they changed to SVO they changed the departure time to midnight from Hanoi and made SVO-HAN an afternoon departure leaving at 1440 arriving at 4am in the morning, their planes are stuck in svo for 8 hours, wonder what VN was thinking..,the Hanoi Moscow route can easily be done in a 24 hour period.
 
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LAX772LR
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 8:34 am

x1234 wrote:
I always wondered why they had both the 787 and A350. Geo-political game playing to both the US & EU!?

Because there's not nearly as much overlap in the size/mission profile between the two aircraft as AvGeeks often imagine... thus they're actually quite complimentary.

Which is why the likes of SQ, QR, JL, BA, AF, VS, CA, CZ, TG, etc etc have all chosen to do so as well.
I myself, suspect a more prosaic motive... ~Thranduil
 
potter787
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 8:54 am

Morgenstern1234 wrote:
potter787 wrote:
Morgenstern1234 wrote:
And VN changed their Moscow airports from DME to SVO



Yeah, they changed it since they signed code share agreement for domestic connections with SU

When they changed to SVO they changed the departure time to midnight from Hanoi and made SVO-HAN an afternoon departure leaving at 1440 arriving at 4am in the morning, their planes are stuck in svo for 8 hours, wonder what VN was thinking..,the Hanoi Moscow route can easily be done in a 24 hour period.



It is meant to facilitate morning domestic connections in both ends. A bulk of domestic flights from HAN departs around 7am - 8am hence leaving SVO at 1440 and landing around 5am make sense. They use the same schedule for CDG, FRA, LHR.
 
potter787
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 9:03 am

LAX772LR wrote:
x1234 wrote:
I always wondered why they had both the 787 and A350. Geo-political game playing to both the US & EU!?

Because there's not nearly as much overlap in the size/mission profile between the two aircraft as AvGeeks often imagine... thus they're actually quite complimentary.

Which is why the likes of SQ, QR, JL, BA, AF, VS, CA, CZ, TG, etc etc have all chosen to do so as well.


IMO, they ordered both mostly for political reasons i.e to reduce the trade surplus with EU and US. First of all, VN 787 and 350 have almost similar capacity ( 787 - 284 or 311 seats or 350 - 305 seats). Secondly, they also use them in very similar missions e.g 350 for CDG and 787 for LHR, FRA, SVO. Mix of both for Japan, Korea and Australia.

Other carriers you mentioned have much bigger widebodies fleet thus it might not be an apple to apple comparison.
 
Motorhussy
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 11:59 am

potter787 wrote:
LAX772LR wrote:
x1234 wrote:
I always wondered why they had both the 787 and A350. Geo-political game playing to both the US & EU!?

Because there's not nearly as much overlap in the size/mission profile between the two aircraft as AvGeeks often imagine... thus they're actually quite complimentary.

Which is why the likes of SQ, QR, JL, BA, AF, VS, CA, CZ, TG, etc etc have all chosen to do so as well.


IMO, they ordered both mostly for political reasons i.e to reduce the trade surplus with EU and US. First of all, VN 787 and 350 have almost similar capacity ( 787 - 284 or 311 seats or 350 - 305 seats). Secondly, they also use them in very similar missions e.g 350 for CDG and 787 for LHR, FRA, SVO. Mix of both for Japan, Korea and Australia.

Other carriers you mentioned have much bigger widebodies fleet thus it might not be an apple to apple comparison.


CDG where cargo as well as passengers is important. LHR etc where it’s mostly pax and bags. Regional use on down time makes sense for both.

Both planes serve them well. And if they’re balancing trade too, then :bigthumbsup:
come visit the south pacific
 
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 12:07 pm

potter787 wrote:
LAX772LR wrote:
x1234 wrote:
I always wondered why they had both the 787 and A350. Geo-political game playing to both the US & EU!?

Because there's not nearly as much overlap in the size/mission profile between the two aircraft as AvGeeks often imagine... thus they're actually quite complimentary.

Which is why the likes of SQ, QR, JL, BA, AF, VS, CA, CZ, TG, etc etc have all chosen to do so as well.


IMO, they ordered both mostly for political reasons i.e to reduce the trade surplus with EU and US. First of all, VN 787 and 350 have almost similar capacity ( 787 - 284 or 311 seats or 350 - 305 seats). Secondly, they also use them in very similar missions e.g 350 for CDG and 787 for LHR, FRA, SVO. Mix of both for Japan, Korea and Australia.

Other carriers you mentioned have much bigger widebodies fleet thus it might not be an apple to apple comparison.


The 789 and A359 may have similar capacity but VN will take delivery of their first 787-10 in the next month, that is configured at 24J343Y, 367 seats in total
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evanb
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Re: Vietnam Airlines profits up, eyes narrowbody orders

Fri Jul 19, 2019 6:27 pm

LAX772LR wrote:
x1234 wrote:
I always wondered why they had both the 787 and A350. Geo-political game playing to both the US & EU!?

Because there's not nearly as much overlap in the size/mission profile between the two aircraft as AvGeeks often imagine... thus they're actually quite complimentary.

Which is why the likes of SQ, QR, JL, BA, AF, VS, CA, CZ, TG, etc etc have all chosen to do so as well.


Agreed, VN have a substantial enough fleet size of each. They have 14 A350s and 11 B787-9 (with 8 -10s on order), so it'll be 19 B787s. I know we disagree on this, but several airlines see needing about 11 of a widebody type to make a separate type viable. So by that rather random benchmark they're doing just fine. That said, VN tend to use the A350 and B787-9 on very similar missions. They don't have that many long haul routes and much of their widebody usage is on medium haul routes.

They long(er) haul schedule is:
HAN-CDG A350 (daily)
SGN-CDG A350 (3x weekly)
HAN-LHR B789 (4x weekly)
SGN-LHR B789 (3x weekly)
HAN-FRA B789 (daily)
SGN-FRA B789 (4x weekly)
HAN-SVO B789 (3x weekly)
HAN-SYD B789 (3x weekly)
SGN-SYD B789 (daily)
HAN-MEL A350 (daily)

That schedule requires only 4 A350 and 7 B789. The rest of the time they're flying regional and domestic with the longest of those around 6 hours (to Japan). They're used fairly interchangeably on those routes as well. But from discussions with them my sense is that this might change a little more when the B787-10s arrive since they'll take over much of the Japan flying, freeing up the A350s for longer missions and opening up some new routes.
 
potter787
Posts: 10
Joined: Wed Jun 29, 2016 11:06 am

Re: Vietnam Airlines profits up, eyes narrowbody orders

Sun Jul 21, 2019 7:28 am

They have more than enough to do all the routes they have now comfortably. Agree that with the arrival of B7810s, they will use them in Japan routes, move A350 to longer haul. Maybe upgrade few regional flights e.g CAN, SIN, BKK to widebodies and open SGN - KIX/TPE - LAX. Medium term I could see them opening HAN - MEL/ PRG
 
Zinu
Topic Author
Posts: 5
Joined: Mon Jun 10, 2019 9:24 pm

Re: Vietnam Airlines profits up, eyes narrowbody orders

Sun Jul 21, 2019 9:46 am

According to a "question and answer" comment by VN (in Vietnamese) on Vietnam Airlines official facebook page, the 787-10 will start operating SGN-PUS (01 Sep), SGN-ICN (1 Oct) and SGN-HAN (22 Aug). There is no official press release yet but I guess this will be announced in the upcoming weeks.

This makes a lot of sense given the current travel demand between South Korea and Vietnam and the 787-10 is a magnificent 'people mover' in VN configuration.

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